Home Economy Boeing Tumbles After FBI Joins Criminal Probe Into 737 MAX Approval

Boeing Tumbles After FBI Joins Criminal Probe Into 737 MAX Approval

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While it should not come as a surprise following news that a grand jury subpoena – which listed the Justice Department’s criminal division listed as a contact – had been sent to Boeing and the FAA, scrutinizing the development of Boeing 737 MAX jetliners and in particular whether corners had been cut with its anti-stall (MCAS) system, moments ago Boeing stuck tumbled when the Seattle Times reported that the FBI has joined the criminal investigation into the certification of the Boeing 737 MAX, “lending its considerable resources to an inquiry already being conducted by U.S. Department of Transportation agents.”

The federal grand jury investigation, based in Washington, D.C., is looking into the certification process that approved the safety of the new Boeing plane, two of which have crashed since October, the Seattle Times reported.

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Conveniently, the FBI’s Seattle field office is located close to Boeing’s 737 manufacturing plant in Renton, as well as nearby offices of Boeing and Federal Aviation Administration (FAA) officials involved in the certification of the plane, which means that the probe should be rather quick.

The investigation, which is being overseen by the U.S. Justice Department’s criminal division and carried out by the Transportation Department’s Inspector General, began in response to information obtained after a Lion Air 737 MAX 8 crashed shortly after takeoff from Jakarta on Oct. 29, killing 189 people, Bloomberg reported earlier this week, citing an unnamed source.

It has widened since then, with the grand jury issuing a subpoena on March 11 for information from someone involved in the plane’s development, one day after the crash of an Ethiopian Airlines 737 MAX 8 near Addis Ababa that killed 157 people, The Associated Press reported this week.

A story by the Seattle Times over the weekend detailed how FAA managers pushed its engineers to delegate more of the certification process to Boeing itself, sparking confusion just what the FAA’s role actually is, and whether it delegated its own duties to the “supervised” company in exchange for kickbacks. The Times story also detailed flaws in an original safety analysis that Boeing delivered to the FAA.

As the newspaper adds, “criminal investigations into the federal oversight of airplane manufacturing and flight are rare, in part because of the longstanding belief  that a civil-enforcement system better promotes candid reporting of concerns without fear of criminal repercussions.”

Criminal investigations into the federal oversight of airplane manufacturing and flight are rare, in part because of the longstanding belief  that a civil-enforcement system better promotes candid reporting of concerns without fear of criminal repercussions. Those criminal cases that have occurred have focused on false entries and misrepresenations.

In 1998, Transportation Department and FBI agents, acting on a whistleblower’s allegations, served a criminal search warrant on Alaska Airlines, seeking evidence of maintenance irregularities.

The report, which hit moments after market close, sent Boeing stock tumbling further in the after hours.

via zerohedge

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